Lotto winners should consider paying down debt, taking out some cash to splurge on something, and investing the rest of their money in a diversified portfolio, experts suggest.

It’s also a good idea to put most of the winnings in a long-term deposit for 12 months or so, but there are smarter options for that money than keeping it in the bank on a long-term basis.

But before making any decision, financial experts say winners should do ... nothing.

A Christchurch couple who won $33.5 million in one of the largest Lotto draws in recent history have revealed they kept their ticket hidden in a sock drawer for days while they worked out what they would do with their winnings.

The couple, who wished to remain anonymous, said they were overwhelmed by the magnitude of the win and needed time to process it before coming forward. The woman said she would come home and cry tears of happiness as the win sank in.

ANZ Private associate director Grant Rae said the first thing people should do is take a deep breath.

“When you win a lot of money, there is no hurry to make life-changing decisions.”

Paying off debt like a mortgage often entered the equation as a place to start, Rae said.

 “We’ve got an old saying, ‘grow it don’t blow it’, but for some people blowing part of it might be exactly what they need.”

Winners should sit down and talk with people they trust like close family members as well as an accountant, lawyer, and financial adviser, he said.

“We’re not here, and no one should be there, to live their life for them but just to help them make even better-quality decisions.”

The remaining money could stay in the bank to begin with, before considering long-term investments, Rae said.

“It’s capital stable, it’s secure in that the chances of a bank going under are very low, and it gives you time while it’s earning some interest.”

Rutherford Rede financial planner Craig Offwood agreed paying down debt was a good place to start before putting the rest in a term deposit.

“It just takes it out of your hands so that you can’t be tempted to constantly be playing around it and gives you time to actually make some rational thoughts and gather your thinking.”

Offwood said that typically most people wanted to help out family members but he cautioned against distributing too much capital too soon.

“That money that you’re left with has a lesser ability to create a stronger income flow and a long-term legacy.”

His colleague Henry Ford, also a financial planner at Rutherford Rede, said there was a risk of “feeling rich” after a windfall.

“And you suddenly start spraying money around and all sorts of things without any framework for understanding ‘how much can I actually afford to give away, consume, etc’.”

Offwood suggested keeping the number of people who knew about the Lotto win as a tight circle.

Financial author and former financial adviser Martin Hawes said otherwise winners would be bombarded with people wanting a share of the money.

“There will be all sorts of people trying to sell you wonderful investment ideas. It seems like a huge amount of money, and also an infinite amount of money, but it’s not and it could very quickly come to seem like it’s not quite enough.”

Hawes said the majority of the money should be invested in a diversified portfolio, not unlike KiwiSaver but something that wasn’t locked away until someone wanted to buy their first home or retire.

This sort of portfolio could include shares, property, fixed interest, and cash.

It would help people retain the real value of the capital (the value after tax and allowing for inflation) rather than term deposits which were getting a 5 per cent return at the moment but less than 1 per cent just a couple of years ago, Hawes said.

Rae said this type of investment was “inflation-proofing” your money.

Hawes said that at the end of the day, people should spend their money on what they want to do and things that will make them happy.

“I have heard of people who have got unexpected large windfalls and it’s actually made them less happy.

“It would be a tragedy to win an amount of money like that and to actually end up, because you’re being bombarded with requests left right and centre, that it makes you less happy that you actually were.”

Georgina Campbell is a Wellington-based reporter who has a particular interest in local government, transport, and seismic issues. She joined the Herald in 2019 after working as a broadcast journalist.